Turkey Taking the CEEC Road

This thesis investigates how Turkey's trade flows would have been affected if they had taken the same road of integration, into the EU, as the CEEC. For this purpose we have used the gravity model and produced both cross section and panel data regressions. The method used is first an in sample estimation of the bilateral trade flows between the CEEC and EU. Secondly a trade potential for Turkey was calculated allowing for a comparison with the observed trade flows in an out of sample estimation. The data used are mainly collected from OECD and contains 1893 observations. The overall result tells us that Turkey outperforms the CEEC but it seems as additional trade could be created from further integration with the EU.